financetom
Business
financetom
/
Business
/
Kroger-Albertson's US anti-trust trial to end but other legal blocks loom
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Kroger-Albertson's US anti-trust trial to end but other legal blocks loom
Sep 17, 2024 3:25 AM

Sept 17 (Reuters) - The trial where U.S. anti-trust

regulators made their case to block Kroger's ( KR ) $25 billion

bid to buy rival grocer Albertsons ( ACI ) will conclude on

Tuesday, but the deal's legal challenges have just begun, with

two more trials this month to hear complaints the merger could

jack up grocery bills.

For the past three weeks, the U.S. Federal Trade Commission

and a coalition of states have sought to prove at trial in

Portland, Oregon, that the deal would harm shoppers and

unionized grocery workers.

By the time that case concludes on Tuesday, the companies

will be on day two of another trial in Seattle where Washington

state's attorney general is challenging the deal. Beginning on

Sept. 30, a judge in Denver will hear Colorado's arguments for

stopping the deal.

"It's a notable increase in the cost, stretches out the

timeline, and is an unwelcome additional collection of

obstacles" for the companies, said William Kovacic, an antitrust

professor at George Washington University.

Kroger ( KR ) and Albertsons ( ACI ) have spent $864 million in merger

costs this year, and they oppose all three cases. Kroger ( KR ) says

the merger will result in lower prices and higher wages.

"Only global, non-unionized giants like Walmart ( WMT ), Amazon ( AMZN ) and

Costco will benefit from this deal being blocked," the company

said in a statement.

In Washington state, where Attorney General Bob Ferguson

went to trial to block the deal on Monday, half of all grocery

sales flow through one of the two chains, and 124 stores are

slated to shift to C&S if the merger proceeds.

In addition to arguing the deal will raise prices and

diminish choices for shoppers, Ferguson has argued it will make

it easier for Kroger ( KR ) to close stores where workers are unionized

and reopen them as non-union.

"We look forward to standing up for Washingtonians in

Washington state court," Ferguson said in a statement.

Colorado, too, has sued to block the merger over concerns

from shoppers, workers and local farmers who supply both chains.

"Colorado cares about having local food. And that is an area

where these two companies compete against each other. It's

important to farmers," Attorney General Phil Weiser said in a

recent interview.

At the Oregon trial that began on Aug. 26, the FTC and a

coalition of eight states plus Washington, D.C. called grocery

executives, union leaders and economists as witnesses to try to

show the deal is likely to drive up prices and diminish workers'

bargaining power by eliminating head-to-head competition between

the two chains.

The two grocers sought to show the deal was necessary to

lower prices at Albertsons ( ACI ) stores and enable both chains to

compete with Walmart ( WMT ).

Kroger ( KR ) has said no stores will be closed as a result of the

merger. But that would not prevent stores being closed or

consolidated down the road.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Copyright 2023-2026 - www.financetom.com All Rights Reserved